Supply Demand Price
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The changes in our society affect millions of people everyday rather good or bad. It is important to study Economics due to increases and decreases in products supply and demand to understand the economy of the 21st century. The main product of supply, demand and price that is affected everyday is the price for gasoline. This has been a continuous problem to all citizens across the United States. The Federal Trade Commission (FTC) has been following this issue closely and the article summary below will discuss its findings.
Demand
When goods become scarce, the market reduces the quantity of those scarce goods people demand; as their prices go up, people buy fewer goods. As goods become abundant, their prices go down, and people want more of them (Colander, 83). This statement is so true with regards to gasoline prices. FTC made that analogy statement as well in the article when speaking on how the prices have increased over the time due to the increases in automotive sales as well as those that prefer public transportation. It is a common trend that once the gas price increase you see less people buying the gas and utilizing the public transportation. So the demand fluctuates based on the price of the product which is very important correlation in the triangle of supply demand and price. The demand for the crude oil has increased significantly but not the availability of it however is still not in comparison to what is actually demanded so this factor is a cause to the increase at the gas price at the pump.
Supply
The main concept to remember about supply is that it is directly affected by the current market price and the quantity the producer can produce. The price changes for consumer gasoline have been driven by changes in supply as opposed to demand in all cases. The supply of gasoline is not only something that is affected globally but it has affects on the US regionally. With federal laws changing in regards to getting more fuel efficient vehicles on the road the supply of gasoline is seeing an increase. This is good because with having a surplus available then it allows prices to go down to those who are not able to buy those types of vehicles. However if the demand for the gasoline goes up due to changes in income or the access to the resources are declining then it can only be assumed that the prices are going to be hiked up for a period of time until equilibrium is brought back. So with increasing the price for the oil the supply will surely go back to where the demand for it does not affect the supply as much.
Price
But how about if the demand is too high and there is not enough supply? This is where high prices come in. Right now there is a worldwide demand for oil because or the way we use oil in gasoline, heating, and making electricity. However